Bid gives Arcadia boss £27m

THE BOSS of retail giant Arcadia is to land a £27m bonanza after agreeing to a £770m bid from retail tycoon Philip Green. Stuart Rose, 53, Arcadia's chief executive, will stay on for a few months before leaving the group, which includes Top Shop and Dorothy Perkins.

He will take away just over £1m for every month of the two years he has been in the job, making it one of the most spectacular executive pay days in corporate history outside America.

The takeover deal marks the start of a huge shake-up on the British High Street that will see Green, who already owns the Bhs chain, rival Marks & Spencer as one of the biggest powers in women's clothes retailing.

The deal, expected to be completed by November, will allow Rose to cash in share options worth £26.8m at Green's offer price of 408p a share. The options were granted to Rose when he became chief executive in 2000. After paying tax of around £10m he will take home approximately £18m.

However, Rose, who earned around £1.5m last year, will not get the one year's salary pay-off he is entitled to as he has agreed to carry on working for the company for some months rather than leave immediately.

The fortune is the latest in a series of windfalls that have marked Rose's 30-year long career in retailing since he started as a Marks & Spencer management trainee in 1972. He bagged £600,000 when he first quit Arcadia in 1997, a further £540,000 for three months work fighting a losing bid battle at Argos, where he was chief executive and more than £2m from Iceland, which he left to take on his current job.

The Arcadia board announced today that it was to accept a raised offer from Green after an emergency board meeting last night. In its statement to the Stock Exchange, the company said: 'The board has concluded that the proposal represents a value which the board will recommend to shareholders.'

The uncertain outlook for High Street spending is believed to have convinced the board that accepting the offer was the best option. The takeover comes after weeks of stalking by Green, whose empire now extends to 1,400 outlets and 45,000 staff. The merged group will have a combined turnover of just under £3bn and a 12.6% share of the women's clothing market, placing it just ahead of Marks & Spencer.

Green is expected to keep all the Arcadia brands for now before deciding whether to sell any. The City gave a thumbs-up to the deal, with shares in Arcadia jumping 15p to 403p, just below the offer price. One of Arcadia's biggest shareholders, Standard Life, said it would accept the takeover bid.

However, Nick Bubb of SG Securities, one of the City's top retail analysts, said he was 'really disappointed' with Arcadia's decision to capitulate. He said Green was 'going to make a lot of money out of it' because he had got the company on the cheap. Green was not available for comment.